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I'M) 


U.S. DEPARTMENT OF AGRICULTURE 
SCIENCE AND EDUCATION ADMINISTRATION 
H Y ATTSVILLE, MARYLAND 20782 


OFFICIAL BUSINESS 
PENALTY FOR PRIVATE USE $300 


POSTAGE AND FEES PAID 
U. S. DEPARTMENT OF 
AGRICULTURE 
AGR 101 





MRR 1090/6/78 


ANALYSIS OF 
SOYBEAN SHIPMENTS 
AT U.S. ORIGIN AND 
OVERSEAS 
DESTINATION 


united states 

I tA M DEPARTMENT OF 
AGRICULTURE 


MARKETING 
RESEARCH 
REPORT 
NUMBER 1090 


PREPARED BY 
SCIENCE AND 
EDUCATION 
ADMINISTRATION 


On January 24, 1978, four USDA agencies — Agricultural 
Research Service (ARS) , Cooperative State Research 
Service (CSRS) , Extension Service (ES) , and the National 
Agricultural Library (NAL) — merged to become a new 
organization, the Science and Education Administration 
(SEA), U.S. Department of Agriculture. 

This publication was prepared by the Science and 
Education Administration's Federal Research staff, 
which was formerly the Agricultural Research Service. 



ACKNOWLEDGMENTS 


This research was made possible through the efforts and contributions of 
numerous individuals and organizations. Valuable assistance and support for 
this work were received from the American Soybean Association and the U.S. 
Department of Agriculture’s Foreign Agricultural Service. Many grain shippers , 
receivers^ and carriers made their shipments, facilities, and equipment 
available for the study. 

USDA's Federal Grain Inspection Service, a cooperator in this project, 
contributed substantially to this study both in developing the project and In 
sampling at the U.S. export elevators and at several overseas destinations. 
Research associates William A. Bailey, William L. Craig, and William G. KIndya 
collected some of the origin samples and Roy E. McDonald, Lawrence A. RIsse, 
Anton J. Bongers, and Ben M. Hillebrand some of the destination samples. 

E„ James Koch provided advice on sampling and data processing of the test 
results. 


Hi 



CONTENTS 


Abstract 

Introduction 

Methodology 

Grade factors 

Foreign material 

Splits 

Quality factors 

Handling and transport facilities 
Transport costs and soybean prices 
Conclusions 


Page 
■ 1 
2 
3 
6 
6 
9 
9 
9 

16 

18 


rade names and names of commercial companies are used 
in this publication solely to provide specific informa- 
lon. Mention of a trade name or manufacturer does not 
constitute a guarantee or warranty of the product by the 
. . Department of Agriculture nor an endorsement by the 
Department over other products not mentioned. 


Washington, D.C. 


Issued June 1978 


iv 




ANALYSIS OF SOYBEAN SHIPMENTS 
AT U.S. ORIGIN AND OVERSEAS DESTINATION 

By C. J. Nicholas and M. E. Whitten 1/ 


ABSTRACT 

Tllis is an interim report to determine whether there are grade and quality 
differences in soybean shipments between U.S. origin and overseas destination. 
Conditions and grade standards are compared and other factors affecting the 
availability and suitability of U.S. soybeans are identified. This study 
quantifies the extent of soybean damage, with suggestions for its reduction. 

escribes specific handling and transport environments and operations that 
cause losses as soybeans are moved through the various marketing channels, 
increasing demands by industry for this type of information prompted this 


Ten soybean shipments with 767 origin and 428 destination samples were 
found to be highly variable. The foreign material and the splits, or broken 
beans, were within the U.S. standards for grade 2 soybeans at both origin and 
destination. The data show an increase in foreign material and splits as 
the soybeans were moved from U.S. ports to overseas buyers. 

The foreign material variations may have been due to in- transit deteri- 
oration or to grading or sampling errors, or they may have been the natural 
result of sampling variations. Although the amount of foreign material in the 
shipments did not exceed the grade standards, more samples are needed to 

determine the amount at the export elevator, based on various sampling methods 
and modes of transport. 

The quality analyses of origin and destination samples 
similar for oil and protein content, averaging 20.7 percent 
and destination and 40.3 and 40.2 percent of protein at ori] 
respectively. 

Gravity activated loading systems for moving soybeans i 
damage than pneumatic unloading systems. Overseas handling 
systems, including clam buckets, pneumatic suckers, and Vac- 
the soybeans when they were moved from the ship to the proci 

1 / Agricultural economist. Transportation and Packaginj 
Laboratory, and research chemist. Seed Research Laboratory, 

Beltsville Agricultural Research Center, Beltsville, Md. 20 ', 


1 



Charter rates to move 10 shipments to overseas destination were lower 
than conference rates because supply and demand were favorable in both the 
soybean and the shipping market. 

Soybean prices during this period were variable, with no apparent 
relationship to quality. 


INTRODUCTION 

Soybeans are a major source of protein in the diets of a large segment 
of the world population and one of the principal U.S. exports for cash sales 
abroad. Therefore, improving handling and transport of this product to 
world markets and reducing the distribution costs are of great importance to 
the U.S. grower, shipper, and overseas consumer. Failure to achieve these 
goals will result in needless waste of this vital source of food and will 
jeopardize the overseas market for U.S. farmers, with greater deterioration 
in transit and increased costs in handling, transport, and processing. 

Complaints by European and Far Eastern buyers about quality of U.S. 
soybeans have centered on the problems of grade determination and alleged 
increases in foreign materials and splits, 2 ] or broken beans. Also, 
questions have been raised on the amount of oil and protein in U.S. soybeans. 
Although foreign buyers have expressed concern about soybean damage and 
deterioration, neither the extent nor the causes have been documented. There 
has been no followup research to develop, evaluate, and demonstrate improved 
facilities, equipment, and techniques for handling and transport of this 
important commodity of American agriculture. 

The increasing importance of Brazil as a world supplier of soybeans 
is well known. Its production increased from about 1 million tons in 1969 
to an estimated 11.6 million tons in 1976, with an increase in exports 
from about 318,000 tons in 1969 to 3.5 million tons in 1975. Since Brazil 
has emerged as an important soybean producer-exporter in 1969-70, the U.S. 
share of the soybean and soybean oil market has fallen from about 95 to 
less than 70 percent. 

Because competition for U.S. soybeans in world markets is becoming a 
matter of concern, not only from production in Brazil but also from related 
substitutable products such as palm oil from the Far East, greater effort 
must be made to assure the grade and quality by solving some of the problems 
in handling and transport of soybeans to foreign markets. If U.S. soybeans 
are to continue to be a major provider of the world f s protein and oil needs, 
improved methods must be developed to enable the U.S. supplier to ship 
soybeans to overseas customers under better conditions and at lower cost. 

The objectives of this study are to determine the nature and extent of 
physical damage and quality deterioration of soybeans in handling and transit 
to domestic and overseas markets, where the damage occurs, and ways to reduce 
such physical and quality losses. 


2/ Defined as soybeans with more than one-fourth broken off (U.S. Dept. 
Agr., Agr. Mktg. Serv. Grain Insp. Manual, p. 189, Instr. 918 (GR-6) 

(Aug. 1971)). 


2 



METHODOLOGY 


Ten soybean shipments were sampled at various U.S. inland shipping 
points and at embarkation and overseas ports . The samples were analyzed for 
such grade factors as foreign material and splits and such quality factors as 
oil, protein, and free fatty acids , Differences in these factors between 
origin and destination were then documented* 

In the United States, mechanical samplers were used at either the inland 
terminal or the export elevators* The grade factors were determined and 
recorded on inspection certificate AD-189 by U.S. grain inspectors. 

Shipments were by unit- train lots of 45 and 65 cars or by river barges 
from U.S. inland points to embarkation ports at New Orleans, La., and 
Baltimore, Md. Six shipments were to Japan, one to Taiwan, and one to the 
Netherlands. 

In Baltimore, from 40 to 100 hopper cars were unloaded at the export 
elevator into drop pits at rates varying from 10,000 to 50,000 bushels per 
hour. For barges in New Orleans, marine leg barge unloaders or pneumatic 
suckers were used. When unloaded, soybeans were moved by conveyor belts from 
the marine legs to the headhouse, where they went through automatic scales. 
Some soybean shipments were moved to storage silos, from which they were 
conveyed to a cleaning system to scalp and remove foreign material. All 
shipments moved in the elevator were monitored by automatic diverter-type 
samplers. The samples were conveyed by gravity through a seamless pipe 
directly to the inspection laboratory, where a federally licensed inspector 
determined the grade. Built into the headhouse were several shipping bins. 
Soybeans loaded out for export moved from the storage silos to the shipping 
bins. During this transfer they were weighed, sampled, and graded. These 
samples provided the basis for the origin samples in this report. After the 
grade was determined, the soybeans were moved from the shipping bins by 
conveyor belts and generally outloaded to the ships through downspouts, with 
gravity as the motive power. 

Unloading procedures overseas were similar to those in 
In Japan, the elevators were equipped with pneumatic unload 
beans were removed from the ship 7 s hold with pneumaf* * 
specially designed clam buckets to hoppers. The hop 
conveyor belts or chain- type drags, which moved then 
similar to those used in the United States. The bea 
spouted from the top of these legs onto conveyor be] 
storage. 

The unloading facilities in Japan included an a 
coastwise boats. It was between the ship and the el 
the soybeans were immediately loaded into barges frc 
suckers or clam buckets without being weighed in th<= 
obtained when the barges reached their destination. 

The European elevator, where shipment 8E808 waj 
towers, which maintained a faster unloading rate. " 
generally had two pneumatic suckers. The soybeans ^ 


3 






Figure 1. Unloading soybeans with pneumatic suckers in Japan. 


BN-46141 


and onto conveyor belts. Some belts led to the elevators and others to a 

d6 i 1Very t0 barges * The bea ns were weighed in the gallery on the 
way to the storage areas and to the barges. 

Because of inadequate sampling procedures and facilities at overseas 
elevators, alternatives had to be developed to assure that representative 
samp es were drawn. The larger Japanese elevators were visited by a U.S. 
Federal gram inspector to determine where and how samples would be obtained 
when shipments were unloaded. Of the overseas samples, 20 percent were 
obtained by automatic samplers, 33 percent by ellis cups, 40 percent by grain 
probes, and 7 percent by pelican samplers (fig. 2). In another series of 
s lpments, percent of the overseas samples were obtained by automatic 
samplers, 48 percent by ellis cups, 6 percent by grain probes, and 4 percent 
by pelican samplers. r 


Samples from shipments overseas were drawn with probes by USDA 
researchers and grain inspectors. Arrangements are underway to temporarily 
install automatic samplers in three European elevators. 

. sample smaller than the total universe is subject to sampling 
variations. Two samples drawn by the same method may differ in several 
respects. The probability of obtaining a representative sample increases 
^apidly if the probes of the sampled soybean lot are increased, the ship 
is evenly loaded, and quality variations are uniformly distributed. 


4 







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siiSiiK 


BN-46142, BN-46143 

Figure 2. — Drawing soybean samples from shipments in Japan: Above, with 

probe; below, with pelican sampler. 


5 


After origin and destination samples were drawn, they were placed in 
plastic bags, sealed, and sent to Washington, D.C. , where they were graded 
by grain inspectors 3/ . They were analyzed by USDA research chemists to 
determine the oil, moisture, and free fatty acid content, and protein analysis 
was provided. 

When all 10 shipments were completed, information on designated grade and 
quality factors were analyzed for mean, minimum, and maximum amounts at a 95- 
percent confidence interval. 

The data for the 10 shipments were obtained from 767 samples drawn during 
loading at origin and 428 samples drawn during unloading at destination. They 
provided information on grade and quality differences between origin and 
destination. 

Since there were so many variables in handling and transport of the 
shipments, more samples were taken than in regular inspections in order to 
obtain some degree of reliability in the data. 


GRADE FACTORS 

Table 1 presents information on the transport, handling, and sampling of 
10 soybean shipments. All ships were of the bulk carrier type and of recent 
construction; they flew foreign flags and were contracted for on a charter 
basis . 


Foreign Material 

The amount of foreign material was the most common complaint voiced by 
overseas receivers of U,S. soybeans. Over half the complaints received by U.S. 
shippers in 1976 pertained to foreign material. Of the 25 complaints 
officially documented by the Oilseeds and Products Division of the Foreign 
Agricultural Service in 1976, 13 were about excess foreign material. The 
amount found in both origin and destination samples indicated that the problem 
was related not only to sampling but to segregation, or natural separation of 
the soybeans and the foreign material in the ship's hold. During loading of 
soybeans, foreign material tends to collect and stratify in layers. 

The segregation of the beans and the foreign material in loading and 
storage may explain the differences in foreign material data in table 2. For 
instance, the foreign material in shipment 1A109 was between 1.5 and 4.2 per- 
cent at origin and 1.7 and 6.6 percent at destination. There was a 16-percent 
mean increase in the foreign material for the 10 subsamples between origin and 
destination; 6 of these sub samples had 20-percent increases or higher. 


3 / The Board of Appeals and Review is comprised of three grain inspectors, 
who normally determine the final grade when the grade at either origin or 
destination is disputed. 


6 




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7 



Table 2. Amount of foreign material in samples from soybean shipments at U.S. origin and overseas destination , 1975-76 




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The data were analyzed to determine whether segregation has any effect on 
the relative amount of foreign material in multiple deliveries, or deliveries 
at more than one overseas port, when the loading and unloading methods were 
similar. Figure 3 indicates an appreciable increase in foreign material in 
the second delivery, with less accumulation in subsequent deliveries. 


Splits 

Table 3 presents data on the percentage of splits in origin and destina- 
tion samples. No extreme variation is indicated and the increases in splits 
etween origin and destination samples do not follow any particular pattern. 
Although the damage was within the limits of the standards for grade 2 soy- 
beans, no broad conclusions can be drawn based on only 10 shipments. However, 
splits have the same variability and segregation as foreign material when 
soybeans are moved from place to place. Foster and Holman 4 / found that 95 
percent of the breakage was beans split in half and 5 percent was broken 
pieces of beans, which would be included in "foreign materials," according to 
U.S. grade standards for soybeans. 

The data collected were studied to see whether there was any correlation 
between splits and multiple deliveries and any relationship between splits and 
segregation of soybeans. Figure 3 shows the percentages of splits for compos- 
ite samples in three deliveries for five shipments. 

Table 3 shows little change in moisture content of the beans between 
origin and destination. Furthermore, no consistent increase or decrease in 
splits was indicated during transit. 


QUALITY FACTORS 

Table 4 shows the amount of oil, protein, and free fatty acids in samples 
from seven shipments at both origin and destination. The satisfactory oil and 
protein content in these samples is important, because some overseas buyers 
have claimed that U.S. soybeans have been low in both oil and protein. The 
data in table 4 suggest some deterioration in oil quality as the percentage of 
splits increased, with a direct correlation between the quantity of splits and 
the quality of oil obtained in a given shipment. 


HANDLING AND TRANSPORT FACILITIES 

The soybeans were exposed to damage-producing hazards when they were 
transported from farm to country elevator by truck, to a river terminal by 
truck or rail hopper car, to an export elevator by river barge or rail, and 
in loading aboard a bulk ocean carrier for movement to final destination. 
Modern grain-handling methods at the various facilities, such as high 
velocity grain streams, pneumatic conveying, and considerable drop heights 


4/ Foster, G. H. , and Holman, L. E. Grain breakage caused by commercial 
handling methods. U.S. Dept. Agr. , Mktg. Res. Rpt. 968, 23 pp. 1973. 


9 










Table 3.— Grade level 1/ of splits in samples from soybean shipments at U.S. origin and overseas destination , 1975-76 



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2/ Unloaded in Japan, except 6A411 in Taiwan, 8E808 in Netherlands, and 9T105 and 10T118, which were unit- train shipments. 
3] Adding or subtracting this interval gives upper and lower confidence limits. 



Table 4. — Quality analysis of samples from soybean shipments at U.S. origin and overseas destination, 1975-76 


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into storage bins and ships ! holds , probably caused some impact damage. 5/ 

As shown in table 3, splits increased from 4 to 39 percent from origin to 
destination for the 10 shipments. 

Recent improvements in handling and transport of soybeans from the farm 
to the export elevators have reduced this damage. For instance, hopper cars 
in the two unit-train shipments, with unloading from bottom hatches, are an 
improvement over the boxcar, which was never designed to transport bulk 
commodities. The boxcar is expensive to load and unload, it requires installa- 
tion of grain doors, and the soybeans have to be spouted over the top of the 
grain doors into the car ? s interior. Furthermore, unloading boxcars requires 
"shaking the cars," which may increase impact damage to the beans. 

Using hopper cars in 2 shipments, with 43 cars in 1 unit-train mov em ent 
and 64 in the other, resulted in considerable savings in time and costs to 
the shipper, carriers, and receivers. The most apparent benefit was in 
reduced rates. The railroads had in effect special rates that applied to 
both shipments ._6/ These trains moved continuously with an empty backhaul and 
a rapid turnaround. The loading of hopper cars averaged 10 minutes and the 
unloading by gravity 8 minutes. The turnaround for a hopper car in the unit 
train from the Middle West to the Gulf of Mexico was about 10 days, whereas 
the time for a hopper car in a conventional train was 30 days. 

The link belt barge unloading device is a decided improvement over the 
clam bucket and the marine leg with cup elevators (fig. 4) used in several 
U.S. and overseas grain elevators. Foster and Holman found a significant 
reduction in breakage in bucket elevator tests . Jj More than $5 million has 
been invested in barge unloaders. Elevator operators report a higher rate 
of unloading and decreased soybean losses in loading than with previous 
methods and equipment. 

Improvements in elevators have been made. For instance in one elevator, 
the movement of beans through the elevator has been increased and costs have 
been reduced. Sixteen loading spouts fed from three shipping belts have been 
replaced by four shiploaders with 35 , 000-bushel-per-hour shuttle belt con- 
veyors and spouts. By extending the shiploaders from the shipping gallery 
over the vessel, it was not necessary to turn the ship around after partial 
loading to assure maximum loading. 

Elevator operators in this study unanimously agreed that the gravity 
system used to handle soybeans in the United States caused less damage than 
the pneumatic suckers and Vac-u-vators used in Europe and at Far Eastern 
ports (figs. 1 and 5). The increased handlings and the lack of adequate 
handling and transport equipment overseas were responsible for the greater 
soybean losses there. 


_5/ Chung, C. J., Chung, D. S., and Converse, H. H. Damage to corn from 
pneumatic conveying. U.S. Dept. Agr., ARS-NC-5, 9 pp. 1973. 

_6/ Railroads have reflected their economies from hopper cars in their 
freight rates for soybeans. These rates are decidedly lower than for boxcars. 
Jj See footnote 4. 


13 




BN-46144, BN-46145, BN-46146 
Figure 4. — Unloading soybeans with link belt 
barge, clam bucket, and marine leg (cup 
elevators) ( top to bottom ) . 


14 




BN-46147 

Figure 5.— Using Vac-u-vators and bagging to load soybeans in Kaohsiung, 

Taiwan. 

Most soybean shipments move overseas in bulk carriers. They are special- 
type cargo ships with six to eight holds designed for moving such commodities 
in bulk as grain* coal* and iron ore* with gravity loading and pneumatic 
unloading. Tankers and "tween-deckers 51 are used only in extreme situations. 

The latter are general cargo ships with one or two decks in the holds. 

The self- trimming bulk carrier, a recent innovation* was used in four of 
the shipments. It is relatively easy to load and unload, with no hazards to 
the cargo as in ships with tween-deckers* which require trimming machines, 
and in tankers, whose steel ladders in the holds damage the beans during 
loading and unloading. 

Although some of these handling and transport methods could reduce 
in-transit damage to soybeans, economic and operational constraints may preclude 
their widespread use. Improved methods* such as the link belt barge unloaders, 
require a large outlay of capital. Unless the elevator operator is willing to 
make this investment, there is little opportunity to reduce this damage. 

Reducing the loading rate or the belt speed at the export elevators might also 
reduce the damage to beans, but the loading capacity of the export elevators 
would be so limited that their efficiency would be seriously impaired. The 
volume moving through the export elevators is so great and the margin of profit 
so small that any operational change that disturbed this relationship could 
have serious implications. In one large grain company, the rate of profit 
was reported as less than 1 cent a bushel. 


15 



TRANSPORT COSTS AND SOYBEAN PRICES 


The rapid increase in soybean prices has forced buyers to consider 
hedging and to reduce costs in moving soybeans to their customers. 


The unit-train shipments between specific points were subject to favor- 
able special commodity rates. Shipment 9T105, a 65-hopper car movement of 
soybeans from Vincent, Iowa, to New Orleans, was subject to $12.50 per ton 
(2,000 lb); this rate applied to 5- to 80-car movements. Shipment 10T118 from 
Columbus , Ohio , to Baltimore cost $7.55 per ton; this was also a commodity 
rate applicable to at least 65— car movements. 


The cost of shipping soybeans overseas fluctuated greatly during the 
study. Soybeans were sold on a cargo and freight basis, which includes all 
the costs incidental to the movement, such as stevedoring, wharfage, drayage, 
and storage. Table 5 shows the cargo and freight costs for U.S. soybean ship- 
ments to overseas destinations. Marine rates for soybeans, like many other 
bulk commodities, are granted only on the basis of cargo plus the freight 
charges to destination for measurement ton. The ocean transport rates for the 
eight shipments were voyage charter rates determined by the world market for 
bulk carriers and were agreed to by the buyers and the carriers involved. 

These conditions made for the lowest transport costs possible. 


Table 5. Cargo and freight costs per metric ton to move U.S. soybeans to 

overseas destinations, 1974-75 


Shipment 

No. 1/ 

Soybean 
cargo cost 

Freight 

cost 

Total 

1 A 1 HQ 




±iiJLUy 

9 A 1 1 ^ 

$183. 35 

$9.00 

$192.35 

ZAiij - J - 

9 A 1 1 « — 

183. 35 

9.00 

192.35 

JrxJL JL O 

AA 91 A 

183.35 

9.00 

192.35 

SA99H 

~ ~ - 271.00 

9.00 

280.00 

-JjtxAZ.Kj 

AAAI 1 — 

181. 00 

9.00 

190.00 

UiV+XX 

7 A S 9 S — 

182.25 

12.75 

195.00 

fironp — 

190.00 

9.25 

199.25 

OjlLQUO 

— 220.00 

12.25 

232.25 


RFanfi- 7 ^\ Shipm f nt ! ! ere l0ad6d at Gulf ° f Mexico P° rts ’ exce Pt shipment 
8E808, which was loaded at a Great Lakes port. All destinations were Japan, 

except Taiwan and Netherlands for 6A411 and 8E808, respectively. 


Although distance is a factor in determining rates, the major 
m the short run is the relationship between the shipping available 
cargoes and the amount of soybeans to be shipped. 


determinant 
for soybean 


C ^ rt u r rates apPiy °nly to a single voyage. Liner charter rates 

ntllod nf t-Ll n Uy6r ^ carrier ^P 1 ^ t0 all voyages during a specified 
period of time. Ocean carriers of soybean cargoes are divided into liners and 


16 



tramp steamers. Liners publish rates for manufactured goods and for small 
quantities of bulk commodities® Their rates for large quantities of bulk 
commodities are termed open rates and are determined by negotiations between 
the ship owners and prospective shippers. 

Transport of U.S. soybeans by tramp steamers under voyage charter is 
divided into two markets. In one market, since U.S. -flag vessels charge much 
higher rates than foreign-flag vessels 5 no direct competition exists with the 
foreign-flag carriers. In the other market, the rates for the foreign-flag 
carriers are interdependent and determined by market conditions. U.S-flag 
vessels compete only for 50 percent of the Government-sponsored soybean 
cargoes, which the Cargo Preference Act of 1954 guarantees them. 

Since ships available during the study were adequate, the market for 
charters helped to keep the rates down. Regularly published conference rates 
are much higher than charter rates and not conducive to moving bulk commodities 
such as soybeans. 

Because of the great overseas demand for U.S. grains, the capacity of the 
carriers was increased considerably from 13 million tons in 1960 to 145 million 
tons in 1975. 

The use of 30,000- to 40, 000- ton bulk carriers in the charter trade 
contributed to lower transport rates because of substantial reduction in unit 
costs. These unit costs included construction and maintenance, but they 
afforded sizable savings in operating costs. Because all the bulk carriers 
that transported the shipments in this study were recently constructed and 
highly automated, the crew costs were reduced significantly. The wage costs 
per ton of soybeans decreased considerably when the newer ships were placed 
in service. Other operating costs, such as insurance and fuel, also declined. 
Shipping soybeans by bulk carriers in most instances was the least costly. 

Ocean rates for the 10 shipments cannot be averaged, because an average 
has no meaning in a constantly fluctuating market. Actual rates per ton for 
shipments from the United States to Europe ranged from $16.60 in 1973 to 
$44.50 in 1975. They were usually discussed in a range from low to hig 
depending on the shipping season. The ocean carriers in this study W 
fixed port of call. 

Shipment 4A216 to Japan with a cargo and freight cost of $280 per metric 
ton (table 5) demonstrates the fluctuating prices of soybeans. This shipment 
represented a contractual commitment made by the buyer in the 1974-75 market, 
when the price of beans was high, and the contract was negotiated as a hedge 
against further price rises. During this period, ocean freight rates to Japan 
were averaging about $12.75 per metric ton. In the 1973-74 market, the ocean 
freight to Japan rose to $25 per metric ton. 

Prices of soybeans during this study varied from $181 per metric ton to 
$271 (table 5). Attempts to quantify price-quality relationships gave meaning- 
less results. In this study, there appeared to be no relationship between 
price and quality. However, this relationship may have been obscured by the 
grading system used and the quality factors for soybeans.. 


17 



CONCLUSIONS 


Analysis of data obtained from grading samples in 10 shipments at origin 
and destination, including splits and foreign material, showed all lots to be 
within the limits of the official U.S. grade standards for soybeans. However, 
there was a high degree of variability , which was the result of different 
sampling methods, in-transit deterioration, and grading or sampling errors. 
Insufficient samples were collected to draw valid conclusions. 

Splits, a major grade variable, are objectionable to foreign buyers. 
However, from the data in this study, the degree to which splits are a problem 
is uncertain because of the limited number of samples. As with the foreign 
material, the amount of splits varied in certain shipments. For Instance, the 
increase in splits between origin and destination was as high as 39 percent 
in one shipment (table 3) . Although the amount of splits and foreign material 
in the shipments did not exceed that permitted by the grade standards, more 
data are needed, based on various sampling methods and modes of transport. 

The increase in both splits and foreign material during unloading at 
destination indicated the effect of repeated handlings. The amount of breakage 
obviously tends to accumulate each time the soybeans are handled. 

The gravity system used to handle and load soybeans in the United States 
caused less damage than the pneumatic suckers and Vac-u-vators used in unloading 
at ports in Europe and the Far East. 

Reducing the velocity at impact would be acceptable only If the rate of 
movement into, through, and out of the elevators was maintained. Providing 
more resilient impact surfaces should be considered. 

The quality analysis is favorable regarding the oil and protein content, 
which was satisfactory (table 4). A common complaint among foreign buyers of 
U.S. soybeans is the low oil and protein content. The increase in the free 
fatty acids in some shipments and not in others and the relationship of fatty 
acids to splits and foreign material require further study. 

The cost data for the 10 shipments were directly related to supply and 
demand. During this study, soybeans were in good supply, prices were average, 
and shipping costs were reasonable. Soybean export prices appeared to be 
directly related to voyage charter rates. 

As a result of this study, additional research is needed on — 

(1) Identifying and verifying sources of damage, especially during loading 
and unloading at both export and import elevators. 

(2) Engineering inputs to develop alternative systems or improvements in 
handling and transport of soybeans. 

(3) Developing standard probe techniques to sample soybeans in ships and 
barges. 


18 



(4) Comparing sampling data collected by various methods and checking 
the accuracy or degree of error in each. 

(5) Examining neutral oil contents to more accurately determine quality 
deterioration. 

(6) Correlating grade and quality factors , such as foreign material and 
free fatty acids 5 and the foreign material and test weight with possible 
effects on oil content and quality. 

(7) Comparing soybean prices with quality factors. 


☆ U. S. GOVERNMENT PRINTING OFFICE : 1978 - - 267 - 227/6243